Office rents plummet as coronavirus drags Hong Kong’s
commercial property transactions to an all-time low
Hong Kong’s commercial property
market, already reeling from last year’s protests, is about to slide further
into the doldrums as the coronavirus epidemic saps demand, according to
analysts.
The volume of transactions for
office, retail and industrial properties is poised for a historic low in
February, having already sunk to record levels in the previous two months.
Meanwhile, a grade-A office building near Central has seen its rent plummet by
two thirds to HK$42 (US$5.4) per square foot, the lowest in 10 years.
The number of deals signed in the
commercial real estate sector is likely to fall below 200 this month for the
first time since records began in July 1995, real estate agent said.
“The number has been below 300
for a period of five straight months, averaging about 250, and that’s the first
time that has happened,” the agent said. “The figure in January [202] has not
reflected the impact of the coronavirus outbreak. Transactions are likely to
remain low.”
In particular, the number of
office transactions in the three months to March may add up to fewer than 150,
marking an all-time low, according to another real estate agency firm.
“The emergence of the latest
coronavirus outbreak has undoubtedly taken a toll on the office market,” the
agent said. “Like during the Sars outbreak, this epidemic will freeze the
turnover of offices in the short term.”
Central’s premium office rents dropped the
most among Hong Kong’s core business districts as its vacancy rate reached 4
per cent in January for the first time in more than five years, according to an
international real estate agency firm.
Bank of
America Tower in Admiralty recently leased a unit
measuring 2,367 square feet for HK$110,700 (US$14,212) a month, or HK$42 per sq
ft, the lowest in a decade, agents said.
The rent per square foot is 67.2
per cent lower than another unit of 3,100 square feet in the same tower that
leased for a record high of HK$128 per sq ft in mid-2018.
The amount of grade-A office
space being leased fell by 173,600 square feet last month as freshly vacated
premises remained on the market, according to the agent.
“Immediate demand has weakened
off the back of the coronavirus, as a number of businesses put decision-making
on hold,” the agent said.
The outbreak threatens the
outlook for this year, “forestalling any possibility of a near-term economic
recovery”, another international real estate agent said.
“The Covid-19 outbreak deals a
second blow to Hong Kong’s property market, already weakened from the social
unrest in 2019, with most sectors to remain under pressure over the near term,”
the agent added. “The office market has come under increased pressure from
depressed occupier demand in the face of uncertainty.”
Average Hong Kong and Central
office rents will fall by 8 per cent and 13 per cent respectively this year,
according to property agency.
“Inspection activity [people
viewing properties] should decline and hence leasing momentum will probably remain
slow,” another agent said. “A challenging business situation will hinder
expansion.”
The agent added the city is
likely to see “postponement of IPOs or companies’ plans to open offices in Hong
Kong”.
(South China Morning Post)
200,000 new homes to be built in 5 years
The SAR administration estimates that nearly 200,000
private and public housing homes can be offered over the next five years, and
it is to set aside about HK$22 billion to invest in Hong Kong-based projects.
The estimated annual supply of private housing from 2020 to
2024 is 19,600 units on average, Financial Secretary Paul Chan Mo-po said in
his budget speech yesterday.
Potential land supply from the 2020-2021 land sale program,
railway property development and private development and redevelopment projects
are expected to provide about 15,700 homes, and another six commercial sites
are estimated to be able provide a floor area of about 830,000 square meters,
Chan said.
"I don't think there is a big problem in achieving the
target of 19,600 between 2020 and 2024," a real estate agent said.
"But if land sales continue to be limited that may impact the actual
completions beyond 2024. And in 2025 or beyond we may see a significant drop in
completions."
The latest land forecast will be released in the second
quarter.
Meanwhile, the estimated production of public housing for
the next five years is 100,400 units, comprising 74,400 public rental homes and
Green Form Subsidised Home Ownership Scheme units and 26,000 subsidized sale
units.
Chan said the government will commence rezoning procedures
for another 25 sites in the coming year, which will involve nearly 85,000
units. More than 90 percent will be public housing.
And government sources said the Wang Chau Phase 2
development is involved. That is expected to provide about 14,000 public
housing units.
Government sources also said the SAR has finished the
assessment of 160 hectares of brownfield sites, which can mean more than 20,000
public housing units completed within 10 years.
And Chan said Hong Kong will continue to pursue new
development area projects, to rezone sites for housing development and to
develop brownfield clusters and urban squatter areas to provide land to
increase the housing supply.
Separately, Hong Kong is to set aside HK$22 billion from
the Future Fund to set up the Hong Kong Growth Portfolio for direct investments
in projects with a "Hong Kong nexus."
(The Standard)
信德中心每呎68元市價租出
正當中環美國銀行中心單位租金接連錄新低，較高位回落50%，上環信德中心租金相對「企得住」，一個細單位以每方呎68元租出，雖較兩年前高位僅跌15%，代理指，呎租屬市價水平。
市場消息透露，信德中心西翼1408B室，建築面積約615方呎，以每方呎68元租出，涉及月租約4.18萬，代理指出，該單位屬罕有細單位，兼且望全海景，假若在市況好時出租，呎租必然創新高。
望全海景優質單位
信德中心最貴租金於2018年2月錄得，該廈西翼28樓8至9室，建築面積2752方呎，望全海景，以每月逾22萬租出，呎租高達80元，屬於該廈新高。
較高位回落15%
該廈近期新低租金於去年11月錄得，信德中心西翼中層2室，建築面積約1402方呎，以每月7.15萬元獲承租，平均呎租51元，該單位望干諾道中樓景，該單位於去年4月易手，透過買賣公司形式成交，市傳作價4486.4萬，平均呎價約3.2萬現時，回報僅1.9厘。
同區商廈信裕大廈亦錄連環承租，低層單位面積約2660方呎，以3.99萬租出，平均呎租約15元；另一租務為同廈低層單位，面積約1668方呎，以4.17萬租出，平均呎租25元。另外，灣仔德士古大廈中層單位，面積約2220方呎，以58830元租出，平均呎租約26.5元。
觀塘萬兆豐中心連環承租，該廈中層D室，面積1915方呎，以58407.5元租出，平均呎租約30.5元；同廈另一中層D室，面積約1915方呎，以45960元租出，平均呎租約24元。
(星島日報)
